The FTX Creditor Liquidation Enters a New Phase: A Detailed Guide for Creditor Claims

With the actual controller of the FTX case being sentenced to 25 years in prison, this globally sensational collapse of the cryptocurrency exchange has come to a temporary conclusion. However, for the vast number of investors and creditors, what they are most concerned about is still the progress of the FTX bankruptcy liquidation case, which directly relates to whether they can recover their losses.

As one of the largest bankruptcy liquidation cases in the world today, the handling of the FTX case has attracted global investor attention. At the same time, it will serve as an important reference for handling bankruptcy cases of large multinational cryptocurrency companies, having a profound impact on future related judicial practices.

Currently, the FTX liquidation entity and claim portal have been established and opened, and the creditors' repayment work is about to begin. This article will provide a detailed introduction to the specific process and precautions for claiming FTX debts.

Background of the FTX Case and Overview of the Liquidation Team

FTX was founded in 2019 and was a top cryptocurrency exchange on par with Binance. Headquartered in the Bahamas, its main business is focused on the United States. FTX has hundreds of affiliated companies and millions of customers, with a valuation of up to $32 billion after its Series C funding in 2022.

The collapse of FTX began at the end of 2022 with a report from Coindesk, revealing that its affiliated company Alameda Research held a large amount of FTX's own issued FTT tokens. Subsequently, market panic spread, and FTX fell into a predicament of breaking its capital chain.

After FTX entered bankruptcy proceedings, the liquidation process has become quite complex due to its involvement in both Bahamian and U.S. jurisdictions. Currently, the joint official liquidator appointed by the Supreme Court of the Bahamas, (JOL), is responsible for liquidating FTX's assets and compensating creditors in accordance with relevant provisions of Bahamian domestic law.

JOL has established a dedicated FTX debt claim declaration website to uniformly accept declarations of customer claims, non-customer claims, and assigned claims. The declaration deadline is May 15, 2024.

Detailed Steps for FTX Creditor Claims

1. Access the FTX claims declaration and compensation portal and register an account.

First, visit the creditor declaration website and click the blue box in the upper right corner to register. You need to fill in information such as your name, email, location, and contact information. It is recommended to use a reliable email, as a verification code will be required for subsequent logins.

Please pay attention to correctly select the type of claimant:

• Individual customers: Users registered under personal names to use the FTX platform.
• Institutional clients: Users who register FTX accounts as legal entities.
• Non-customer creditors: Entities with other creditor relationships with FTX

2. Register details of creditors and client accounts

For individual or institutional clients, you can directly submit the FTX account registration information to link the account. After completion, you need to carefully verify whether the displayed asset balance is correct. If there is any dispute, additional materials must be provided through the dispute process.

Non-client creditors must submit professional debt basis and certificates. For assigned FTX bankruptcy claims, a complete assignment certificate must be submitted. If the claim has collateral, relevant certificates must also be submitted.

Finally, complete the KYC identity verification process to complete the declaration.

Explanation about Duplicate Declaration

For investors who have already declared their claims on the KROLL platform in the United States, if they declare again on the Bahamas platform, it will be regarded as:

1. Withdraw the creditor claims against FTX Trading Ltd. and other entities in the United States.
2. The rights and obligations shall be governed and handled by the courts of the Bahamas.

It should be noted that the United States and the Bahamas have reached a preliminary consensus on the liquidation of bankruptcy assets, which will be distributed as a whole after liquidation. Therefore, declaring on different platforms will not affect the final compensation, but may affect specific matters such as the recognition ratio of claims and the handling of objections. It is recommended to consult a professional lawyer before making a decision.